Gov. Dayton signs $9.50 minimum wage into law

Gov. Mark Dayton signed the minimum wage bill into law Monday afternoon, which will give more than 325,000 workers in Minnesota a pay raise beginning Aug. 1.

The measure, which cleared the House and Senate last week, will raise the minimum wage to $9.50 per hour for employees at most large businesses.

"Minnesotans who work full-time should be able to earn enough money to lift their families out of poverty, and through hard work and additional training, achieve the middle-class American Dream,” said Dayton at the bill-signing ceremony in the State Capitol rotunda, the Star Tribune reports.

Currently, Minnesota’s minimum wage is $6.15 per hour, one of the nation’s lowest, although most larger businesses must pay the federal standard of $7.25. The increase to $9.50 will make Minnesota one of the highest minimum-wage states. It also includes a provision that would allow the minimum wage to rise by the rate of inflation each year, starting in 2018. That increase would be capped at 2.5 percent.

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Labor, religious and nonprofit groups had urged the wage increase, while restaurant and business groups said it will force them to lay off workers and raise prices.

No Republicans in either house of the Legislature voted in favor of the bill, and several Republican candidates for governor said after the signing that they would oppose the indexing provision.

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"I don't think it's a good idea to index the minimum wage to inflation," said Sen. Dave Thompson, R-Lakeville, according to MPR News. "Look, we all want people to have good jobs and earn more money, and we want families to thrive and do well. But you don't do that with minimum wage increases. You do that with a robust, thriving economy."

Here are the specifics of the law, which goes into effect on Aug. 1:

– $9.50 minimum wage for businesses with gross sales over $500,000 in 2016. $8 in August 2014 and $9 in August 2015.

– $7.75 minimum wage for businesses under $500,000 in gross sales in 2016. $6.50 in August 2014 and $7.25 in August 2015.

– The $7.75 minimum wage rate would also apply for large businesses in the following circumstances: 90-day training wage for 18- and 19-year-olds, all 16- and 17-year-old employees working under a J-1 visa.

– Starting in 2018, all wages would increase each year on Jan. 1 by the rate of inflation measured by the implicit price deflator; capped at 2.5 percent.

– Indexed increase could be suspended for one year if there’s a substantial downturn in the economy, pending a public hearing and public comment period.